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APEC Summit exposes deep chasm between U.S. and China (Video)

The Duran Quick Take: Episode 24.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at an APEC Summit which saw the United States and China drift further apart in their trade deal negotiations.

Next weekend’s G20 summit between Chinese President Xi Jinping and United States President Donald Trump will determine the trajectories not only of China-US relations but also the world economy.

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Via South China Morning Post


As investors wait nervously for clues coming out of the crucial meeting, expected to take place on the sidelines of the G20 summit in Buenos Aires, any kind of deal that would bring a ceasefire in the trade war would help reduce uncertainties that have already led to a rout in global markets.

But the lack of a deal would not only escalate trade tensions and darken the clouds hanging over global economic growth, it could also expand the trade war into a cold war with dire geopolitical implications.

With so much at stake and plenty of potential deal breakers, it is little wonder that pessimism has prevailed.

But there are also reasons to remain optimistic as after nearly a year of trade tensions, both Xi and Trump are under rising pressure to thrash out a deal to calm the markets and bring respite to the turbulent bilateral ties.

On the surface of things, the war of words and displays of bravado between the two countries in the run-up to the summit hardly augur well.

At the recent Apec summit in Papua New Guinea, Xi and US Vice-President Mike Pence traded barbs over trade, security, and regional developments in strong and forthright language as both presented conflicting visions of the future. In his speech, Xi did not mention the US directly but clearly referred to it when he blasted unilateralism and protectionism which would add uncertainty to the world economy, and declared “history has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, produces no winner”.

In turn, Pence was more direct by saying that China had taken advantage of the US for “many, many” years and those days were over. “The US will not change course until China changes its ways,” he said.

In diplomacy, known for its coded words and understatements, such bare-knuckle language is about as tough as it gets.

The exchanges came just weeks after Pence delivered what was widely seen as one of the most hawkish speeches against China by a senior US official in decades. In the speech in October, Pence accused China of military aggression, stealing US technology, and meddling in US politics.

In Beijing, Pence’s speech was briefly seen as the Trump administration’s comprehensive and full-frontal policy declaration on China, but the worries eased somewhat when there was no immediate follow-up from the US.

It is true that Pence’s speeches may have reflected the sentiments of China hawks in the Trump administration, but his strong rhetoric – along with China’s – could also be seen as part of the maneuvering in the run-up to the summit between Xi and Trump.

The strong words from both sides, if nothing else, help play down expectations for the summit and make it easier to play up any agreement to be had.

The reality is that as both sides spar publicly and show intransigence on their demands, they have been in constant dialogue at different levels and through official and unofficial channels over the past months to narrow their differences for a possible deal.

There have been suggestions that the US side has presented a list of more than 140 demands and China is believed to have responded that it could work to meet at least two thirds of them, even though the details are sketchy at present.

As repeatedly argued in this space, China has good reasons to make concessions over trade, such as ramping up purchases of US products and lowering import tariffs, and expanding market access to American and other foreign investment. Doing so is in China’s own interests – as is taking effective measures to better protect intellectual property rights, another US demand – because it is striving for technological innovation.

History shows China needs external pressure to push its reforms and opening up at critical junctures. This is one of those moments.

For the US side, the pressure on the White House to seek a truce with China is also intensifying. This is vividly illustrated by the outburst of Peter Navarro, a trade adviser to Trump and an outspoken China hawk, who recently accused Wall Street bankers and fund managers of being “unpaid foreign agents” to pressure Trump into some kind of a deal.

Since this outburst, Navarro appears to have been sidelined by the White House after Larry Kudlow, another adviser to Trump, rebuked him and said his remarks “were way off base”.

Previously, White House officials including Kudlow had cited the buoyant US economy and stock markets as arguments that the US could afford to play the long game and outlast China.

It is true that amid a slowing economy and a ballooning trade war, China’s stock markets have fallen about 30 per cent this year, making it among the worst-performing equity markets in the world, but the uncertainties caused by the China-US tensions have also erased all of the US stock market gains this year.

Interestingly, there have been suggestions in the US that China has no intention of making a deal with Donald Trump as it will wait to see what happens with his domestic political problems after the Democrats retook the House of Representatives.

That view is lopsided, to say the least. Despite his unconventional presidency, Trump could be the best US president for China at a time when anti-China sentiment cuts across a wide spectrum in the US.

He may be close to China hawks such as Navarro, who see China as an existential threat, but Trump seems more interested in riding the anti-China sentiment to advance his domestic goals, which include beefing up his voter base for a re-election bid in 2020.

As Trump often boasts that he is his own man and he makes all the important decisions, he should meet his match in Xi, China’s most powerful leader in decades.

Trump said recently that China had largely completed its response to the US’ demands and was missing four or five big issues. Naturally, those can only be sorted out between Xi and Trump themselves.

It is premature to hope for a full resolution of the trade tensions through one meeting, but at the very least, a truce is certainly achievable and would bring necessary respite and relief for the global economy.

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Rastislav Velka MoravaJoeRastislav Vela MoravaShaun RameweTheCelotajs Recent comment authors
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mijj
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mijj

the essence of the difference in outlook and style.

For any particular issue ..

China/Russia examine the subtleties of the political/economic situations and dynamics and plan optimal paths and contingencies accordingly.

The US strategists examine old episodes of Star Trek ask themselves “what would Captain Kirk do?”.

Joe
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Joe

funny but not realistic

Platon
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Platon

Pence looks like a dangerous ‘crazy’ who has got his self-image from DC comics.

For those who think Trump is bad, or Hillary, I fear Pence is far, far worse, and may be the face of things to come as Corporate Fascism continues on its spiral of tyrannical decay in the halls of the occupied Washington Regime.

Rastislav Vela Morava
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Rastislav Vela Morava

True. Let’s not forget that corporate “fascism” or state control of corporations in China, is in an advanced stage even when compared with the US, not to mention the social credit system or technocracy being implemented in China, on the population.

Joe
Guest
Joe

Yes my friend!

We will experience fascism from China like never before in our know history…

Rastislav Velka Morava
Guest
Rastislav Velka Morava

Thanks. And that is why I do not understand the blind China Cheer-leading. A lack of critical thinking or perhaps just wishful thinking?
To simplify:) US bad, China equally bad, if not worse. Russia good!

TheCelotajs
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TheCelotajs

Vice President Mike Pence is trying to be something he is not a TUFF GUY when he tried to stare down Russian President Putin.

Shaun Ramewe
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Shaun Ramewe

China – like Russia – laugh at the shameless idiocy of the ZioWest Yank-losers and their ripped-off flunkies.

Rastislav Velka Morava
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Rastislav Velka Morava

Russia is laughing, while not dependent on trade with the USA. China on the other hand is wholly dependent, and entitled in thinking that any nation must trade with them. Selling one’s goods is a privilege, not a right.

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Airline wars heat up, as industry undergoes massive disruption (Video)

The Duran Quick Take: Episode 145.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine the global commercial airline industry, which is undergoing massive changes, as competition creeps in from Russia and China.

Reuters reports that Boeing Co’s legal troubles grew as a new lawsuit accused the company of defrauding shareholders by concealing safety deficiencies in its 737 MAX planes before two fatal crashes led to their worldwide grounding.

The proposed class action filed in Chicago federal court seeks damages for alleged securities fraud violations, after Boeing’s market value tumbled by $34 billion within two weeks of the March 10 crash of an Ethiopian Airlines 737 MAX.

*****

According to the complaint, Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by rushing the 737 MAX to market to compete with Airbus SE, while leaving out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.

It also said Boeing’s statements about its growth prospects and the 737 MAX were undermined by its alleged conflict of interest from retaining broad authority from federal regulators to assess the plane’s safety.

*****

Boeing said on Tuesday that aircraft orders in the first quarter fell to 95 from 180 a year earlier, with no orders for the 737 MAX following the worldwide grounding.

On April 5, it said it planned to cut monthly 737 production to 42 planes from 52, and was making progress on a 737 MAX software update to prevent further accidents.

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Via Zerohedge…

Step aside (fading) trade war with China: there is a new aggressor – at least according to the US Trade Rep Robert Lighthizer – in town.

In a statement on the USTR’s website published late on Monday, the US fair trade agency announced that under Section 301 of the Trade Act, it was proposing a list of EU products to be covered by additional duties. And as justification for the incremental import taxes, the USTR said that it was in response to EU aircraft subsidies, specifically to Europea’s aerospace giant, Airbus, which “have caused adverse effects to the United States” and which the USTR estimates cause $11 billion in harm to the US each year

One can’t help but notice that the latest shot across the bow in the simmering trade war with Europe comes as i) Trump is reportedly preparing to fold in his trade war with China, punting enforcement to whoever is president in 2025, and ii) comes just as Boeing has found itself scrambling to preserve orders as the world has put its orderbook for Boeing 737 MAX airplanes on hold, which prompted Boeing to cut 737 production by 20% on Friday.

While the first may be purely a coincidence, the second – which is expected to not only slam Boeing’s financials for Q1 and Q2, but may also adversely impact US GDP – had at least some impact on the decision to proceed with these tariffs at this moment.

We now await Europe’s angry response to what is Trump’s latest salvo in what is once again a global trade war. And, paradoxically, we also expect this news to send stocks blasting higher as, taking a page from the US-China trade book, every day algos will price in imminent “US-European trade deal optimism.”

Below the full statement from the USTR (link):

USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies

The World Trade Organization (WTO) has found repeatedly that European Union (EU) subsidies to Airbus have caused adverse effects to the United States.  Today, the Office of the United States Trade Representative (USTR) begins its process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes those subsidies.

USTR is releasing for public comment a preliminary list of EU products to be covered by additional duties.  USTR estimates the harm from the EU subsidies as $11 billion in trade each year.  The amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.

“This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” said U.S. Trade Representative Robert Lighthizer.  “Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft.  When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”

In line with U.S. law, the preliminary list contains a number of products in the civil aviation sector, including Airbus aircraft.  Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist.

Background

After many years of seeking unsuccessfully to convince the EU and four of its member States (France, Germany, Spain, and the United Kingdom) to cease their subsidization of Airbus, the United States brought a WTO challenge to EU subsidies in 2004. In 2011, the WTO found that the EU provided Airbus $18 billion in subsidized financing from 1968 to 2006.  In particular, the WTO found that European “launch aid” subsidies were instrumental in permitting Airbus to launch every model of its large civil aircraft, causing Boeing to lose sales of more than 300 aircraft and market share throughout the world.

In response, the EU removed two minor subsidies, but left most of them unchanged.  The EU also granted Airbus more than $5 billion in new subsidized “launch aid” financing for the A350 XWB.  The United States requested establishment of a compliance panel in March 2012 to address the EU’s failure to remove its old subsidies, as well as the new subsidies and their adverse effects.  That process came to a close with the issuance of an appellate report in May 2018 finding that EU subsidies to high-value, twin-aisle aircraft have caused serious prejudice to U.S. interests.  The report found that billions of dollars in launch aid to the A350 XWB and A380 cause significant lost sales to Boeing 787 and 747 aircraft, as well as lost market share for Boeing very large aircraft in the EU, Australia, China, Korea, Singapore, and UAE markets.

Based on the appellate report, the United States requested authority to impose countermeasures worth $11.2 billion per year, commensurate with the adverse effects caused by EU subsidies.  The EU challenged that estimate, and a WTO arbitrator is currently evaluating those claims

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Mueller report takes ‘Russian meddling’ for granted, offers no actual evidence

RT

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Via RT…


Special counsel Robert Mueller’s ‘Russiagate’ report has cleared Donald Trump of ‘collusion’ charges but maintains that Russia meddled in the 2016 US presidential election. Yet concrete evidence of that is nowhere to be seen.

The report by Mueller and his team, made public on Thursday by the US Department of Justice, exonerates not just Trump but all Americans of any “collusion” with Russia, “obliterating” the Russiagate conspiracy theory, as journalist Glenn Greenwald put it.

However, it asserts that Russian “interference” in the election did happen, and says it consisted of a campaign on social media as well as Russian military intelligence (repeatedly referred to by its old, Soviet-era name, GRU) “hacking” the Democratic Congressional Campaign Committee (DCCC), the DNC, and the private email account of Hillary Clinton’s campaign chair, John Podesta.

As evidence of this, the report basically offers nothing but Mueller’s indictment of “GRU agents,” delivered on the eve of the Helsinki Summit between Trump and Russian President Vladimir Putin in what was surely a cosmic coincidence.

Indictments are not evidence, however, but allegations. Any time it looks like the report might be bringing up proof, it ends up being redacted, ostensibly to protect sources and methods, and out of concern it might cause “harm to an ongoing matter.”

‘Active measures’ on social media

Mueller’s report leads with the claim that the Internet Research Agency (IRA) ran an “active measures” campaign of social media influence. Citing Facebook and Twitter estimates, the report says this consisted of 470 Facebook accounts that made 80,000 posts that may have been seen by up to 126 million people, between January 2015 and August 2017 (almost a year after the election), and 3,814 Twitter accounts that “may have been” in contact with about 1.4 million people.

Those numbers may seem substantial but, as investigative journalist Gareth Porter pointed out in November 2018, they should be regarded against the background of 33 trillion Facebook posts made during the same period.

According to Mueller, the IRA mind-controlled the American electorate by spending “approximately $100,000” on Facebook ads, hiring someone to walk around New York City “dressed up as Santa Claus with a Trump mask,” and getting Trump campaign affiliates to promote “dozens of tweets, posts, and other political content created by the IRA.” Dozens!

Meanwhile, the key evidence against IRA’s alleged boss Evgeny Prigozhin is that he “appeared together in public photographs” with Putin.

Alleged hacking & release

The report claims that the GRU hacked their way into 29 DCCC computers and another 30 DNC computers, and downloaded data using software called “X-Tunnel.” It is unclear how Mueller’s investigators claim to know this, as the report makes no mention of them or FBI actually examining DNC or DCCC computers. Presumably they took the word of CrowdStrike, the Democrats’ private contractor, for it.

However obtained, the documents were published first through DCLeaks and Guccifer 2.0 – which the report claims are “fictitious online personas” created by the GRU – and later through WikiLeaks. What is Mueller’s proof that these two entities were “GRU” cutouts? In a word, this:

That the Guccifer 2.0 persona provided reporters access to a restricted portion of the DCLeaks website tends to indicate that both personas were operated by the same or a closely-related group of people.(p. 43)

However, the report acknowledges that the “first known contact” between Guccifer 2.0 and WikiLeaks was on September 15, 2016 – months after the DNC and DCCC documents were published! Here we do get actual evidence: direct messages on Twitter obtained by investigators. Behold, these “spies” are so good, they don’t even talk – and when they do, they use unsecured channels.

Mueller notably claims “it is clear that the stolen DNC and Podesta documents were transferred from the GRU to WikiLeaks” (the rest of that sentence is redacted), but the report clearly implies the investigators do not actually know how. On page 47, the report says Mueller “cannot rule out that stolen documents were transferred to WikiLeaks through intermediaries who visited during the summer of 2016.”

Strangely, the report accuses WikiLeaks co-founder Julian Assange of making “public statements apparently designed to obscure the source” of the materials (p.48), notably the offer of a reward for finding the murderer of DNC staffer Seth Rich – even though this can be read as corroborating the intermediaries theory, and Assange never actually said Rich was his source.

The rest of Mueller’s report goes on to discuss the Trump campaign’s contacts with anyone even remotely Russian and to create torturous constructions that the president had “obstructed” justice by basically defending himself from charges of being a Russian agent – neither of which resulted in any indictments, however. But the central premise that the 22-month investigation, breathless media coverage, and the 448-page report are based on – that Russia somehow meddled in the 2016 election – remains unproven.

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Rumors of War: Washington Is Looking for a Fight

The bill stands up for NATO and prevents the President from pulling the US out of the Alliance without a Senate vote.

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Authored by Philip Giraldi via The Strategic Culture Foundation:


It is depressing to observe how the United States of America has become the evil empire. Having served in the United States Army during the Vietnam War and in the Central Intelligence Agency for the second half of the Cold War, I had an insider’s viewpoint of how an essentially pragmatic national security policy was being transformed bit by bit into a bipartisan doctrine that featured as a sine qua non global dominance for Washington. Unfortunately, when the Soviet Union collapsed the opportunity to end once and for all the bipolar nuclear confrontation that threatened global annihilation was squandered as President Bill Clinton chose instead to humiliate and use NATO to contain an already demoralized and effectively leaderless Russia.

American Exceptionalism became the battle cry for an increasingly clueless federal government as well as for a media-deluded public. When 9/11 arrived, the country was ready to lash out at the rest of the world. President George W. Bush growled that “There’s a new sheriff in town and you are either with us or against us.” Afghanistan followed, then Iraq, and, in a spirit of bipartisanship, the Democrats came up with Libya and the first serious engagement in Syria. In its current manifestation, one finds a United States that threatens Iran on a nearly weekly basis and tears up arms control agreements with Russia while also maintaining deployments of US forces in Syria, Iraq, Afghanistan, Somalia and places like Mali. Scattered across the globe are 800 American military bases while Washington’s principal enemies du jour Russia and China have, respectively, only one and none.

Never before in my lifetime has the United States been so belligerent, and that in spite of the fact that there is no single enemy or combination of enemies that actually threaten either the geographical United States or a vital interest. Venezuela is being threatened with invasion primarily because it is in the western hemisphere and therefore subject to Washington’s claimed proconsular authority. Last Wednesday Vice President Mike Pence told the United Nations Security Council that the White House will remove Venezuelan President Nicolás Maduro from power, preferably using diplomacy and sanctions, but “all options are on the table.” Pence warned that Russia and other friends of Maduro need to leave now or face the consequences.

The development of the United States as a hostile and somewhat unpredictable force has not gone unnoticed. Russia has accepted that war is coming no matter what it does in dealing with Trump and is upgrading its forces. By some estimates, its army is better equipped and more combat ready than is that of the United States, which spends nearly ten times as much on “defense.”

Iran is also upgrading its defensive capabilities, which are formidable. Now that Washington has withdrawn from the nuclear agreement with Iran, has placed a series of increasingly punitive sanctions on the country, and, most recently, has declared a part of the Iranian military to be a “foreign terrorist organization” and therefore subject to attack by US forces at any time, it is clear that war will be the next step. In three weeks, the United States will seek to enforce a global ban on any purchases of Iranian oil. A number of countries, including US nominal ally Turkey, have said they will ignore the ban and it will be interesting to see what the US Navy intends to do to enforce it. Or what Iran will do to break the blockade.

But even given all of the horrific decisions being made in the White House, there is one organization that is far crazier and possibly even more dangerous. That is the United States Congress, which is, not surprisingly, a legislative body that is viewed positively by only 18 per cent of the American people.

A current bill originally entitled the “Defending American Security from Kremlin Aggression Act (DASKA) of 2019,” is numbered S-1189. It has been introduced in the Senate which will “…require the Secretary of State to determine whether the Russian Federation should be designated as a state sponsor of terrorism and whether Russian-sponsored armed entities in Ukraine should be designated as foreign terrorist organizations.” The bill is sponsored by Republican Senator Cory Gardner of Colorado and is co-sponsored by Democrat Robert Menendez of New Jersey.

The current version of the bill was introduced on April 11th and it is by no means clear what kind of support it might actually have, but the fact that it actually has surfaced at all should be disturbing to anyone who believes it is in the world’s best interest to avoid direct military confrontation between the United States and Russia.

In a a press release by Gardner, who has long been pushing to have Russia listed as a state sponsor of terrorism, a February version of the bill is described as “…comprehensive legislation [that] seeks to increase economic, political, and diplomatic pressure on the Russian Federation in response to Russia’s interference in democratic processes abroad, malign influence in Syria, and aggression against Ukraine, including in the Kerch Strait. The legislation establishes a comprehensive policy response to better position the US government to address Kremlin aggression by creating new policy offices on cyber defenses and sanctions coordination. The bill stands up for NATO and prevents the President from pulling the US out of the Alliance without a Senate vote. It also increases sanctions pressure on Moscow for its interference in democratic processes abroad and continued aggression against Ukraine.”

The February version of the bill included Menendez, Democrat Jeanne Shaheen of New Hampshire, Democrat Ben Cardin of Maryland and Republican Lindsey Graham of South Carolina as co-sponsors, suggesting that provoking war is truly bipartisan in today’s Washington.

Each Senator co-sponsor contributed a personal comment to the press release. Gardner observed that “Putin’s Russia is an outlaw regime that is hell-bent on undermining international law and destroying the US-led liberal global order.” Menendez noted that “President Trump’s willful paralysis in the face of Kremlin aggression has reached a boiling point in Congress” while Graham added that “Our goal is to change the status quo and impose meaningful sanctions and measures against Putin’s Russia. He should cease and desist meddling in the US electoral process, halt cyberattacks on American infrastructure, remove Russia from Ukraine, and stop efforts to create chaos in Syria.” Cardin contributed “Congress continues to take the lead in defending US national security against continuing Russian aggression against democratic institutions at home and abroad” and Shaheen observed that “This legislation builds on previous efforts in Congress to hold Russia accountable for its bellicose behavior against the United States and its determination to destabilize our global world order.”

The Senatorial commentary is, of course, greatly exaggerated and sometimes completely false regarding what is going on in the world, but it is revealing of how ignorant American legislators can be and often are. The Senators also ignore the fact that the designation of presumed Kremlin surrogate forces as “foreign terrorist organizations” is equivalent to a declaration of war against them by the US military, while hypocritically calling Russia a state sponsor of terrorism is bad enough, as it is demonstrably untrue. But the real damage comes from the existence of the bill itself. It will solidify support for hardliners on both sides, guaranteeing that there will be no rapprochement between Washington and Moscow for the foreseeable future, a development that is bad for everyone involved. Whether it can be characterized as an unintended consequence of unwise decision making or perhaps something more sinister involving a deeply corrupted congress and administration remains to be determined.

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